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Report: Surprising Issues Impacting Heavy Construction During COVID-19 - ForConstructionPros.com

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Heavy civil construction is deemed essential to our economy and has continued in many jurisdictions throughout the COVID-19 economic shutdown. However, data from The Civil Quarterly (TCQ), a new publication from Dodge Data & Analytics, reveals contractors in this sector are facing supply chain issues and other challenges in keeping jobsites going.

The Civil Quarterly (TCQ) is based on original research collected quarterly from civil contractors and engineers. The research provides a snapshot of the current business health of contractors operating in this dynamic environment. The inaugural report features research on how technology is transforming civil jobsites and on the prevalence of important safety practices, and future issues will continue to offer insights into key trends that are transforming the sector.

Ninety-nine contractors responded to the survey conducted online from mid-April to mid-May 2020. The key business health findings suggest that heavy civil contractors are generally optimistic about business conditions, despite impacts of COVID-19, which contrasts with other Dodge research about commercial firms:

  1. Over half (56%) have a high level of confidence about the market's ability to provide new business opportunities for the next 12 months, increasing to 63% for a two-year outlook.
  2. Contractors appear to be satisfied with the level of backlog they have right now, since the ratio of the average months of backlog reported and of the average ideal backlog is 92. This contrasts with commercial contractors who in a recent Dodge study had a ratio of average current to ideal backlog of 73.

    However, the research also uncovered two areas of concern for these contractors: changes in profit margin and the availability of skilled workers.

    1. 38% expect a decrease in their profit margins in the next year, and only 29% expect an increase.
    2. 60% have a high level of difficulty finding skilled workers currently, and 53% expect the cost of skilled workers to increase in the next six months. Almost half (43%) of those expecting the skilled labor cost increase believe that they will be challenged to meet budget requirements on their projects due to it.

    These findings show an industry adjusting well to the impacts of the global pandemic, yet cautious about their bottom line. The metrics will be tracked in future surveys and changes reported in upcoming issues of TCQ. In addition, the technology study reveals widespread adoption of many advanced tools and digital processes in the heavy civil sector, including:

    1. Drones and ruggedized tablets, which are used by more than half of contractors.
    2. Heavy equipment operated remotely, or machine control, used by 42%.
    3. Utility detection used by 40%, and another 23% that are shown to be considering.
    4. Nearly one quarter also found to be considering adoption of technology that is currently less widely in use, such as mobile mapping systems and e-Ticketing. The growth in e-Ticketing is further explained by an owner’s perspective on how it improves safety, especially during the pandemic, and eTicketing will be more thoroughly explored in the next quarter’s report.

    The top benefits that contractors expect from adopting new technologies onsite are increased productivity, better ability to manage the project budget and improved safety performance. When asked about their biggest barriers to using new technologies onsite, the highest percentage (56%) point to the cost of technology, and workforce challenges are also obstacles, with 47% concerned about workforce adoption of technology and 40% lacking the skilled resources to manage technology.

    The study also showed that heavy civil contractors prioritize safety investments, with about two-thirds reporting that they became more important over the last two years and will continue to be more important over the next two years. They also currently rely far more on processes and policies than on technology to keep workers safe, with over three quarters reporting that regular communication about safety (89%), safety policies based on industry best practices (77%) and an emphasis on safety culture (77%) were the means used to keep workers safe.

    In contrast, only 47% are actually tracking safety data across projects to determine company best practices, and even fewer are using new technologies like wearables (14%) or video tracking with AI analysis of worker behaviors and ergonomics (4%). Likewise, communication about major project activity is employed by 62% to keep the surrounding community safe, compared with just 19% who employ automated equipment for that purpose.

    Dodge Data & Analytics will provide this report free to the industry on a quarterly basis. Future editions of The Civil Quarterly will track a variety of business health metrics and address a wide range of additional related topics to provide a comprehensive view of this complex and ever-changing segment of the construction economy. The report can be downloaded for free at www.infotechinc.com/thecivilquarterly.

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